technicolor - 2018 Registration document

1 PRESENTATION OF THE GROUP OVERVIEW AND HISTORICAL BACKGROUND

Historical background 1.1.2 GRI [102-10] [102-15] [102-49]

REFOCUSING OUR BUSINESSES & STRATEGIC ACQUISITIONS

FINANCING STRUCTURE While investing in its future Technicolor has continuously sought to strengthen its financial structure through debt repayments as well as refinancing, repricing and amendment transactions, thus allowing the Group to significantly reduce the cost of its debt, while enhancing its financial and operational flexibility and extending the Group’s debt maturity profile. In March 2017, Technicolor raised incremental term loans of €275 million and $300 million, the proceeds of which were used to entirely repay its old term loans maturing in 2020. This allowed the Group to simplify its financial structure as the term loans were issued under the new term loan debt agreement signed in December 2016 which is covenant-lite and maturing in 2023. The refinancing transactions and debt repayments that occurred in 2016 and 2017 resulted in around €30 million of interest cost savings on an annual run rate basis. In December 2018, Technicolor prepaid the European Investment Bank (“EIB”) loan of €90 million. For more information about the refinancing and the Group’s debt covenants, please refer to Chapter 2.3: “Liquidity and Capital resources” and to Chapter 6: “Financial Statements”, section 6.2: “Main events of the year”.

Technicolor launched a strategic roadmap in February 2015 focused on improving the scale of Connected Home and on growing Production Services by expanding its offering in the Animation, Games and Advertising segments. Technicolor completed in the second half of 2015 two acquisitions aligned with the above strategic plan: Cisco Connected Devices, the Customer Premise Equipment business of Cisco, was integrated in Technicolor’s Connected Home Division. Technicolor’s Production Services Division acquired London-based The Mill. In addition, the Group also won additional large studio customers (Fox and Lionsgate) in DVD Services and acquired the North American assets of Cinram to onboard these customers immediately. In 2018, Technicolor announced an outsourcing agreement from Sony DADC to Technicolor in North America and Australia to start in the second quarter of 2018 and Connected Home launched a three-year transformation targeting market share gains while improving profitability being able to absorb potential new headwinds in the market. In the first quarter of 2019, Technicolor announced it has received a binding offer and entered into exclusive negotiations with InterDigital for the sale of its R&I activity. It is worth highlighting that InterDigital acquired Technicolor’s Patent Licensing business in 2018.

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TECHNICOLOR REGISTRATION DOCUMENT 2018